IT Firms’ Time & Material Revenue Drops to 35% Over Two Decades as Clients Push for Accountability, Innovation
Mumbai: The revenue share of time and material (T&M) contracts in the Indian IT sector has halved over the past 20 years, falling to 35% in 2024 from 70% in the early 2000s. The shift underscores a growing demand among global clients for outcome-based models that emphasize accountability and innovation. Time and material contracts, which traditionally bill clients based on hours worked and materials used, have long been a staple of IT services. However, as businesses seek greater value and alignment with strategic goals, they are increasingly opting for fixed-price and outcome-driven contracts , which now constitute a majority of IT services revenue. Client Expectations Drive the Change The push toward accountability is driven by clients' focus on achieving tangible results and innovation in service delivery. Enterprises are prioritizing key performance indicators (KPIs) such as faster product rollouts, cost efficiencies, and enhanced customer experiences. “Outcome-based mo...